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Bill cuts, removes certain Fund benefits
Rep. Joseph Palacios (R-Saipan) will formally introduce today a bill that would eliminate the cash-strapped NMI Retirement Fund’s enhanced benefit accrual formula and special cost of living allowance for judges and elected officials, limit surviving spouses’ benefits, and eliminate benefits for all other dependents.
Palacios said he hopes his colleagues would see the merit of his bill to help prolong the Fund’s lifespan.
“Since it appears unlikely that the Commonwealth government will make its full required contribution, it is necessary to reduce the Retirement Fund benefits, particularly those benefits which are not consistent with traditional retirement plans,” House Bill 17-310 says.
Among the specific provisions is removing the surviving spouse’s eligibility for the cost of living increase of 2 percent per annum upon reaching 62, commencing on the anniversary of the spouse’s annuity date, calculated using simple interest.
For survivors of Class I and II members, the minimum spouse annuity will continue to be $6,000 per year, but the maximum spouse annuity will be capped at $25,000, the bill proposes. Surviving children’s benefits would either be reduced or removed.
Palacios earlier said in these times when the Fund is in dire strait, the CNMI cannot afford to continue to pay $80,000 a year to a surviving spouse of a former official. That former official was receiving $160,000 in annual salary. He said this is unfair to most retirees receiving less than $25,000 in pension annually.
By Haidee V. Eugenio
Reporter
